Facebook Ads Spend Calculator + 1 Free download

ByUrban Renstrom Posted on Facebook
Facebook Ad Spend Calculator

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How much should one budget for Facebook Ads is the most frequent question?

The next one is if €0.5 for ThuPlays is a lot, or if €0.95 per website click is big, or if €5 leads are too much, or how to cut CPM in half?

My answer is always always the same: don’t guess and focus on the metrics that matter to your business.

Scroll and see this Facebook Ads Spend Calculator is the sure-fire way to help determine those numbers.

UPDATED: Post updated February 2021, to reflect new understandings, check spelling and grammar, improve readability, adding cool calculators features and FREE download, and bring the post up to date.

Don’t worry, this is Urban Renström, there is always science and research involved in everything I do, discuss, and teach.

Skip Ahead ➡️ and Try the Facebook Ads Calculator 🧮

The top 10 Metrics that (should) Matter to your Business

These are business-level KPIs. So keep these in mind as you march through the Facebook ads spends calculator.

  1. Revenue
  2. Profit
  3. Cost of customer acquisition (CAC)
  4. Customer Lifetime Value
  5. The conversion rate of your sales page
  6. Cost of video ThruPlay
  7. Cost of Leads
  8. Number of leads
  9. Leads to Clients ratio
  10. Customer lifetime value (LTV)
  11. Client Churn

A few Basic Business Building Principles

*The cost to acquire new customers is always much much greater than keeping existing clients and selling more products and services to them. Think about the entire customer lifetime value cycle.

**Acquiring new clients is an investment in your business, not an expense.

***The Eisenhower principle is always in fashion

****Tools change but business fundamentals are a constant

First Things First – How Much to Budget for Facebook Ads?

Yea, budgeting is important. Also, is knowing the net worth of a new client (Lifetime Value!)? Therefore, flip the budget coin over and ask instead ‘what is the customer lifetime value of my existing clients. Then decide how much of that lifetime value you want to invest to acquire new clients.

Lifetime value is all the revenue minus expenses you get from a client during the lifetime they are a client.

Calculating Facebook Advertising Spend

Example: the *product* is a €99 financial budgeting video course helping aspiring homeowners learn how to budget and save for a mortgage to buy their dream home.

A simple conversion based funnel looks like the below image.

Facebook Ads Spend Calculator Funnel example
Facebook Ads Spend Calculator simple Facebook ad to video funnel

Let’s use our Facebook ads spend calculator on this simple funnel.

This funnel uses the conversion objective. And is an image advert to a cold audience with an offer..

The link in the advert takes people to a sales page. The red watch video button directs people to the shopping cart. Upon payment, the customer is directed to the video course and learn how to budget and save for a mortgage. Nothing tricky here. Thoughts and deeper explanation into the a-e bubble steps.

Begin at the End when making Facebook Ads Spend Calculation

Keep these questions and answers at hand. These are the end question you must answer.

  • What is your revenue goal for this product?
  • What is the sales price for this product?
  • What is the CTR on your advert?
  • What is the conversion rate on your sales/landing page?
  • What is your shopping cart abandonment rate?
  • What is your existing CPM for a cold audience?
  • What is your Advert CTR?
  • What is your Ads Frequency?

Our goal at the end of this mental gymnastics is to see if you can achieve your campaign goals. Time to try out the Facebook ads spends calculator.

#KnowledgeisPower

THE Facebook Ads Spend Calculator

Use this Facebook ad spend calculator as a sandbox. A safe place to build quickly, erase and begin again. Adjust the number and see which has number has the largest leaver on the Facebook ad cost, the CPC, the Budget, Impressions, etc.

Facebook Ads Spend Calculator Rev 2

Input your Numbers

See Your Results

Below is the Explanation for each of the 15 *Boxes* in the Facebook Ads Spend Calculator

Performance marketers (I’m calling you out!) use goals as their guiding light to stay the course and achieve! (hyperbole!)

The revenue goal is the financial goal (€£$) you are trying to achieve for this product, launch, business. Be that a monthly, quarterly, or yearly goal.

Is this self-explanatory? What is the price you are charging for your product/service? One of the main inputs into the Facebook ads spend calculator.

CPM is defined as cost per mile. €1 CPM means it costs €1 for 1000 ad impressions.

CPM is the traditional unit of measure for advertising. Be that TV, papers etc., including Facebook ads.

CPM numbers increase and decrease following the supply and demand curve, the competition for the same audience and the audience size, the quality of your adverts, your ads account quality!, the value Facebook users get from your ad and the estimated action rates from your ads and other factors.

The Facebook ads spend calculator will not provide you with this number. You must enter this. Guestimate from previous campaigns or alternatively estimate conservatively with a high number.

CTR is the magic metric showing how often someone clicked on your advert taking them off of Facebook to your website (for example).

A high clickthrough rate is an indicator your audience is accepting your offer/headline/image.

Click through rates vary by month, season and year. Vary by industry, audience size, competition and other factors. See CPM above.

Wordstream‘s published industry average CTR numbers range from 0.47% to 1.61%, employment/training, legal respectively.

Your mileage will vary. And these numbers are not benchmarks, they are simply better than entering ‘0’!

As with the CPM numbers above the Facebook ads spend calculator does not provide this number. You must enter the number. Guestimate from previous campaigns or alternatively estimate conservatively with a high number.

Landing and Sales page Conversion Rate is the number of people who took your desired action (pressed a signup button, add to cart, purchased product/service/course) divided by the number of people who landed on your Landing/Sales page from your advert.

E.g. 10 sales from 1000 visits = 1% conversion rate. Where to get these numbers? Google Analytics, Facebook ads reporting, your sales numbers.

From Wordstream’s data, the conversion rates range from 2- 14%, industry dependent. 2% is technology, 14% is legal. As always your mileage (results) will vary.

An abandoned cart occurs when a person adds an item to their cart and does not complete a purchase.

Have you ever shopped on Amazon, pressed add to cart on that *iPhone X+ extra mega* new phone and then the dog barked, the wind flew the phone rang, the email pinged. And you forgot about that *iPhone X+ extra mega* on Amazon? You abandoned your shopping cart. Happens. All. The. Time.

What is your rate? Enter in this field. Don’t know? Enter 0

As with the CTR, CPM numbers above the Facebook ads spend calculator does not provide this number. You must enter the number.

Often, people see your advert more than once. This is not a bad thing. If your audience is large, e.g. >500K, then the frequency of the ad will a small number. If retargeting to a 1000 person audience then the frequency will be higher.

Projected Cost per Click. The formula is CPC = CPM/CTR.

Calculated from the numbers you entered.

Using your abandoned cart rate, from above, this is the number of sales you need to achieve your revenue goals.

Click on your Advert to get ad clicks to get the required sales (=revenue goal/product price)

A number of clicks on your advert = number of sales using Abandoned cart rate / (divided) by your landing/sales page conversion rate.

A number of Advert impressions is required to get the number of clicks to achieve your revenue targets.

Reach is defined as the number of Impressions divided by the frequency of the ads. The reach number is always lower than the number of impressions.

Calculated number

This box displays the number of sales you need to get to achieve your revenue goal.

The cost to acquire a customer/client.

Cost per acquisition, CPA. Defined at the CPC / (divided by the) landing page conversion rate.

Finally! Facebook Ads Budget this is the estimated amount of budget required to achieve your revenue goals.

Sometimes Life, like this Calculator, Begs More Questions than it Answers!

*What if the CPA number is greater than the product cost?

yep, that does happen and one purchase is not the complete business story. Consider the customer lifetime value. If this €99 product is one of many to sell to people then maybe breakeven on this first product is ok…knowing that in a month or two they will buy a €299 product.

*What if my CPC is above €1 what do I do?

One metric out of context is not helpful. Sometimes during the year advertising costs go up, think BFCM.

*How do I lower my CPA?

Good question and not easily able to answer in the span of two sentences.

However, reverting back to the*conversion funnel* image of earlier. Advertising to a cold audience and expecting sales is the toughest sell ever. People don’t know you from anyone. Better is *warming up people* by putting an article between points *b* and *c*. E.g. “9 Secret Ways Future Homeowners can Save for a Down payment”. This article offers real and practical suggestions, the thing the ‘how-to’ of the problem. Then the CTA on that blog post is bought the video course the ‘what to do’.

Three big things this improves. 1) cost for the ad to the article is much lower than an ad for the product. 2) the conversion rate of people from Landing page to customer is much higher compared to an advert to a landing page. 3) You accelerate the know you, like you and trust you phases – so that people are more likely to trust you with their money!

*What Role Does Retargeting Adverts Play in the Facebook Ads Cost?

A big part. Custom audiences are the most powerful audiences on the Facebook ads ecosystem. Using our simple *Conversion funnel* from above. The three-place to use retargeting adverts are at point *b*, *c*, and *d*.

*b* If the creator of the advert was a video then you can retarget people who watch different lengths of the video but did not click through to the landing page. if using a static image then you cannot retarget people.

*c* very easy to retarget people that visited the landing page but did not take the desired actions – in this case, click the CTA and buy the course.

*d* retarget people who land on the shopping cart but don’t land on the thank you page.

NOTE when using the *conversion objective*: Facebook recommends ~50 *optimization events* (conversions) per week. If you will not get 50 sales/conversions per week then you must move your *optimization events* to a point higher in the funnel. Sales are at the bottom of the funnel.

For example, move the *optimization events* from the *receipt / TY* post-payment page to the Add to cart or the landing page (page views). Do this to get the 50 *optimization events* per week. Then and when you are confident of getting >50+ move the *optimization events* further down the funnel.

‘The Metrics that Matter‘ to your Business

Yet, when you open the Facebook Ads Manager and look, a tidal wave of metrics and numbers flood over your head and can easily drown you.

Facebook gives us 231 different metrics (yes, I counted) and these are the 11 important Facebook Ads Metrics you should monitor, and the 220 to ‘ignore’.

completion rate on most online courses

The completion rates range from 0.7% to 52.1%, with a median value of 12.6% see the MOOC Completion Rates research pdf.

Industry reports and instructional designers alike typically report that only between 5 to 15 percent of students who start free open online courses end up earning a certificate. From esurge.

Wizccabin quotes eLearning course completion rates at less than 15%.

A few happy, Thoughtful and thorough thoughts on this timely funnel

  • I whipped 👨🏽‍🍳 this up a funnel in seconds and the graphic in minutes. Don’t give out about it!
  • Using a Facebook Ads spend calculator does not guarantee results! This tool is that – a tool.
  • *Conversion Funnel* – conversion is one of the 12 Facebook advertising objectives.
  • *a* is the desired and *target audience* in this example (yes, more than 3 people!). The number of factors to mix to find audiences are ‘endless’ reaching 100!? (*!* = factorial, not an explanation point)
  • *b* Creatives options to stop thumbs are endless. Video views get the lowest cost.
  • *c* is the landing/sales page for this example video course. As you hopefully notice change in the conversion rates is a large leaver to pull to affect sales, click, CPA, and Facebook ads budget. Instituting a proper CRO testing regime moves the results needle.
  • *d* Shopping cart abandonment. Yea, we all abandon our shopping cart. Therefore test these forms for conversions. Because lots of people fill their baskets and don’t buy.
  • *d2* the second step, (not listed) is the connection to your CRM/email marketing system. CRM/email marketing is you communicating everything to your students/customers.
  • *e* Completion rates for online courses range from 1% to 50%. Meaning 50-99% of people who pay for courses don’t achieve the desired learning outcomes of the course. Reengage people who did not watch the video using email!

Download: THE Facebook Ads Calculator

The ONE Facebook Ads Spend Calculator to Rule Them All! 💍

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FB Ads Calculator download

Stop Wasting Money. Find your Budget. Invest in Success. Launch Positive.

Facebook Ads Spend Calculator – FAQ

(CLT or CLTV) is the total revenue earn from a single client – over the lifetime that person is a client.

Cost per Acquisition (CPA) is the cost to get a phone call, lead submission, or a *newsletter* signup. These are *broad marketing acquisition events* and may or may not convert into paying clients or customers.

When using the Facebook Video Views objective, the default optimization and billing is Thruplay.

ThruPlay lets advertisers choose to pay only for ads that are played to completion for videos shorter than 15 seconds. For videos, ThruPlay optimizes and bills for video ads played for at least 15 seconds. This optimization is available with the auction or the reach and frequency campaigns.

Note: A video’s full length is considered to be watched at least 97% of the video. Since people frequently drop off when credits roll or content fades out before the true end of a video.

Haha. Great question and nope. Well, I lie (sort of), all the information is available in the ads manager. What the Facebook ads spend calculator does is put all the questions into one easy and simple tool.
Scroll up and Download The Facebook Ads spend Calculator!

The *right* Facebook ad cost is that number that enables you to achieve your advertising and business goals.
The cost of Facebook ads is relative to each advertiser. A CPA of €100 is high for some and low for others. One number out of context is close to meaningless.
What is the right Facebook ad cost for you? Use the Facebook ads spend calculator and get an estimate.

1-Customer Lifetime Value formula (LTV) is the sum of profits (revenues-cost) realized from a client across the entire lifetime that person is a client – minus the cost to acquire the client.
2–Customer lifetime value: The present value of the future cash flows attributed to the customer during his/her entire relationship with the company1.

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6 Comments

  1. Maybe I’m looking at this type of post. Thanks for explaining every part of ads cost. My starting time I used to free classified site (redacted) to promote my business. Now I’m in Paid And Ads (and) this post will help me to keep on.

    Reply

  3. Hi. I’m trying to create a calculator for myself in Airtable and I’m getting stuck on one part of the formula. Can I message you?

    Reply

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